Exchange bets favor Obama for Democratic nomination
WASHINGTON (Reuters) - Hillary Clinton will win Democratic primary elections in Pennsylvania, Kentucky and West Virginia in the coming weeks, but rival Barack Obama will ultimately capture the party's presidential nomination, traders were betting on Monday.
Traders on the Dublin-based Intrade prediction market also put their bets on the Democratic party to hold new primary elections before June 30 in Michigan and Florida, where earlier results were declared invalid in a fight over the date of the elections.
But even that, the traders were betting, wouldn't be enough to help Clinton win the Democratic nomination to oppose Republican John McCain in the November general election.
Intrade traders gave Obama a 75 percent chance of winning the Democratic nomination for U.S. president, versus 23.5 percent for Clinton. Traders on the Iowa Electronic Markets, a nonprofit exchange run by the University of Iowa for research purposes, gave Obama a 74 percent chance of winning, versus 24 percent for Clinton.
Prediction exchanges let traders buy and sell contracts on the likelihood of future events. Contracts are structured so the prices can be read as a percent likelihood of an event occurring. Studies of the prediction markets have shown they have an accuracy comparable to that of public opinion polls.
Traders on Intrade, which offers contracts on the outcome of individual state races, gave Obama, who would be the first black U.S. president, a 98 percent chance of winning the Mississippi presidential contest on Tuesday night.
Clinton was seen as having about a 2 percent chance of winning the state, where black voters are expected to make up more than half the Democratic turnout.
Clinton, a New York senator, was tipped to win the Pennsylvania primary on April 22, with traders giving her an 81 percent chance versus 25 percent for Obama, trading data showed.
Pennsylvania would be an important victory for Clinton, who would be the first woman U.S. president. She trails Obama in delegates to the party's nominating convention this summer. More delegates are at stake in Pennsylvania than any other remaining contest, so the election offers her a chance to narrow the delegate gap with Obama, an Illinois senator.
OTHER STATE RACES
As the Obama-Clinton duel for the Democratic party nomination winds toward the August convention in Denver, the traders were betting Obama would carry North Carolina, Oregon, and Montana; Clinton would carry West Virginia and Kentucky; and Indiana was a tossup.
In previous presidential election years, the party contest has been sewn up long before primaries in these states.
No matter which candidate wins the nomination, traders on Intrade and the Iowa Electronic Markets were forecasting a Democratic victory in the November general election. Intrade traders were giving the ultimate Democratic nominee a 61.5 percent chance of winning, versus about 39 percent for the Republican.
Traders on the Iowa markets saw a narrower race, with the Democrat having a 57 percent chance of winning, versus 47.4 percent for the Republican.
Trading in contracts such as whether Clinton or Obama will clinch the nomination has numbered in the hundreds of thousands on Intrade.
(Editing by Jackie Frank)